The future of Bitcoin (BTC) policies under President-elect Donald Trump may hinge on the global investment community's perception of the United States economy and the US dollar. Ki Young Ju, CEO and founder of CryptoQuant, has indicated that assets such as Gold and Bitcoin usually experience price increases when investors perceive threats to U.S.
economic dominance. Nonetheless, current investor confidence in the U.S. economy and the U.S. dollar as a safe haven currency remains robust. Ju suggests that this strong confidence in the U.S. dollar's stability makes it unlikely for the Trump administration to implement pro-Bitcoin policies or adopt a Bitcoin strategic reserve, aimed at maintaining the dollar's dominance.
Such a scenario could lead to a reversal of any previously proposed Bitcoin policies. Ju points out that even before his inauguration, Trump frequently emphasized the power disparity existing between the U.S. and other nations. This, combined with an increase in capital inflows to the U.S. dollar, could strengthen the perception of its supremacy.Ju also mentioned that many Koreans are leaning towards U.S.
dollars instead of gold or Bitcoin as a means of retaining value, particularly as the Korean won continues to weaken. This trend is reflective of broader movements in emerging economies where individuals increasingly favor U.S. dollar stablecoins to protect their wealth. The dollar strength index reveals that the U.S.
dollar has gained strength since October 2024. In related updates, Charles Cascarilla, co-founder and CEO of Paxos, provided insights during the Bitcoin Middle East and North Africa (MENA) conference. He asserted that the financial system is transitioning towards a fully onchain model, where dollar-pegged stablecoins will play a pivotal role in the blockchain economy.
These stablecoins are thought to enhance the utility of the U.S. dollar by marrying the speed and global connectivity of the internet with traditional fiat currencies. In regions currently facing hyperinflation, the U.S. dollar acts as a critical store of value in light of swiftly depreciating local currencies.
For example, in March 2024, Turkey saw its inflation rate escalate to 67%, which led to an unprecedented spike in stablecoin purchases relative to GDP worldwide. A report from Chainalysis published in 2023 disclosed that more than 50% of digital assets sent to Latin American countries such as Argentina, Brazil, Colombia, Venezuela, and Mexico were stablecoins..